MEM SMEs show resilience, but no upturn in sight
Three out of four companies in the mechanical, electrical, and metal industries assess their current situation as unfavorable. This is shown by the new Swissmechanic economic barometer.
MEM SMEs remain under pressure, affected by weak demand, the continuing strength of the Swiss franc, and the impact of US tariffs, which have been having a noticeable negative effect since the summer. Although the tariff agreement with the US brings some relief, the high tariffs were still in full effect at the time of the survey.
Margin erosion continues
Around half of companies report declining order intake and sales. Only one in five companies report rising orders and sales, and only one in seven SMEs report rising margins. Margin erosion has now continued unabated for three years and is limiting the investment opportunities of many companies. One in four companies has to postpone planned investments due to financing restrictions. Most of these companies lack the necessary capital. «Our SMEs are not sprinters. They have proven for years that they can also endure long distances – from the energy crisis to the pandemic to the current tariffs. But now we need stable framework conditions so that this marathon does not become endless,» says Nicola Tettamanti, President of Swissmechanic.
According to Swissmechanic, capacity utilization remains below the multi-year average. Although 71 percent of companies have orders for the next four weeks, only a quarter can secure production for longer than twelve weeks. The proportion of companies implementing short-time working has also risen: currently, 21 percent are using this instrument, with more than half affecting over 40 percent of employees.
SMEs demonstrate adaptability
Despite these challenges, many MEM SMEs are demonstrating remarkable resilience and adaptability. Four out of ten companies have already implemented measures to stabilize their business – from process and cost optimization to tapping into new markets in Europe. Swissmechanic Director Erich Sannemann emphasizes: «Our members think entrepreneurially, act in a solution-oriented manner, and remain innovative – even under pressure. But without targeted relief and investment incentives, competitiveness threatens to erode in the long term. Clear signals from politics and business are now needed.»
Source: Swissmechanic
